According to the Law of Large Numbers,if 26 out of 100 homes are likely to sustain earthquake damage in a 30-year period of time in San Jose,California,and 12 out of 100 homes in the same location are likely to be damaged due to flooding during the same time period,the premium for earthquake coverage will be ____________.

Question

Quizplus · Accepted Answer

According to the Law of Large Numbers, the larger the sample size, the more accurate the prediction of future events. Since earthquake damage is more likely to occur than flooding damage (26 out of 100 homes vs 12 out of 100 homes), the premium for earthquake coverage will be higher than the premium for flood insurance.

According to the Law of Large Numbers,if 26 Out of 100